The general aim of the proposal is to address recruitment and retention problems in hospital nursing departments. The application more specifically proposes to test a differential pay structure (DPS) model. Components of the model use: 1. Education and responsibility factors for assigning base pay. As the entry position for professional nursing, the baccalaureate-prepared nurse is used as the bench-mark. 2. Fair Labor Standard Act criteria for categorization of salaried (exempt) and hourly- rated (non-exempt) staff. Associate nurses would qualify for overtime pay and professional nurses would earn compensatory time. 3. Economic motivation to increase volunteers for evenings, nights, and weekends. This will involve increasing pay differentials for unpopular hours and decreasing pay rates for daytime Monday through Friday employment. 4. Competency levels to replace lock-step pay structures commonly based upon length of service. With actual model implementation, peer review processes would be used to assign competency levels above the probationary level. 5. Bonuses, sizeable in nature, as awards on selected employment anniversary dates. Bonus monies do not affect the base pay of the employee. The model will be tested using nursing department employee records in two, not-for-profit, community hospitals. Forecasting linear models will simulate the institution's existing pay structure and the DPS model using three time frames current, two years, and four years hence. There will also be testing of an institution defined optimal mix staffing plan utilizing revised job descriptions required of the DPS model.